Dolby filed suits vide Suit no CS(COMM) 1425/2016 and CS(COMM) 1426/2016 against various parties including the two major Chinese companies Oppo and Vivo, and their number of affiliated local entity, at the Delhi High Court alleging patent infringement of its technology and for illegally selling phones with Dolby technology without paying appropriate royalties for use of its patented technologies.

The defendants had filed applications, without prejudice to their rights and contentions, state that to enable them to continue manufacturing and selling goods with the technology in which the plaintiffs claim patent, that they are ready and willing to deposit in this court the royalty as computed and stated in the plaint. The applicants/defendants offer to deposit royalty in this court at the rate of Rs.32/- per unit manufactured /sold/imported. However the counsel for the Plaintiff contended that they have specified the standard royalty charged by them from all licensees and which is graded as per the volume of manufacturing/sales/imports. It was also contended on behalf of Plaintiff that the royalty at the highest rate would work out to about Rs.38/- per unit and that the defendants should be directed to pay royalty at the said rate directly to the plaintiffs in US Dollars, as is being paid under interim orders in a large number of other suits, a compilation whereof is handed over in the court. It was also contended that the defendants should pay also the arrears of the royalty due with effect from the date the defendants started manufacture/sale/import of the goods with the subject technology.

As per the order on the 27th of October 2016, the court ordered that the defendants should furnish the particulars regarding the manufacture, importation and sale of the products on the 5th of the succeeding month. Moreover, the defendants are required to pay on the 8th of the succeeding month the royalty at the rate of Rs.34/- and in return, would allow the continuance of the importation/sale/manufacture of the goods. The directors of the said companies have agreed to be bound by the undertaking of the court.

Further, after much deliberations/arguments/contentions pertaining to the rate of royalty to be paid interim, the Plaintiffs and Defendants has represented to the Hon’ble Court that the parties have worked out an interim arrangement during the pendency of the suit. They have in Court handed over a draft of the interim arrangement which had been perused and found acceptable by the Court. The said terms envisaged the appointment of a Mediator. The counsels state that this Court may appoint any retired Judge of this Court as Mediator and they would pay lump-sum remuneration of Rs.5,00,000/- for mediation, to be shared equally between the plaintiffs and the defendants. Chief Justice A.P. Shah (Retd.) has agreed to mediate as per the recent order dated 14th December 2016.

In the light of the above it would be interesting to note the final verdict in the matter and thus is much awaited.